Business
Acquisition of Further Interest in Horse Hill
Acquisition of Further Interest in Horse Hill.
About this update from Uk Oil & Gas Plc
[{"type":"text","content":"\n \nRNS Number : 1643I UK Oil & Gas PLC 07 August 2019 \n\nUK Oil & Gas PLC\n(\"UKOG\" or the \"Company\")\n \nUKOG net share of Horse Hill oil field increases to 86% via purchase of Tellurian's 35% interest\n \nUK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has signed a binding heads of terms with Tellurian Investments LLC (\"Tellurian\") to acquire the entire share capital of its subsidiary Magellan Petroleum (UK) Investment Holdings Limited (\"Magellan\") for a total consideration of £12 million in cash and shares. Magellan holds a 35% direct interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences, UKOG's flagship asset.\n \nUpon completion of a share purchase agreement (\"SPA\"), this key acquisition will see UKOG's Horse Hill net oil sales revenues, net reserves and recoverable resources increase by over 69% from our current 50.635% interest to a material 85.635% net share. Crucially, the acquisition will also give the Company full control over the forward Horse Hill drilling programme and production schedule, together with sole ownership of the Horse Hill oil field site lease.\n \nAs a consequence of this transaction, drilling of the much-anticipated HH-2/2z Portland horizontal well will follow very shortly after completion of the SPA.\n \nThis acquisition is in accordance with UKOG's stated business plan to further consolidate its position in key assets with near term cash generation potential. The acquisition is fully funded primarily by current cash reserves and partly by a convertible loan, which the company has entered into today, but has not yet drawn down.\n \nIt should be noted that the cash consideration will not impact UKOG's ability to fund the forthcoming Horse Hill 2/2z drilling and extended testing campaign, as cash funds for its full 85.635% share were set aside and ringfenced internally in Spring of this year. The convertible loan detailed below also ensures full funding for UKOG's increased share of future production facilities costs and other near-term surface, subsurface and regulatory costs necessary to bring the field into long-term production.\n \nTransaction details:\n \nThe £12 million total consideration payable to Tellurian comprises:\n· An £8 mil...